Why do I need to open a company in Singapore?
Opening a business in Singapore is considered the most optimal and popular option for foreign investors who want to enter the Asia-Pacific market.
Singapore’s economic heyday is due to its vast retail networks, as well as initiatives that the state shows. Today, this state is attractive not only for multinational companies, but also for aspiring entrepreneurs.
Its popularity for registration is due to a number of reasons, among them:
- strong economic development;
- sound tax policy and low worldwide tax rates;
- strategic geographical location;
- developed financial structure.
Recently, businessmen working in the CIS countries prefer to cooperate with Ltd companies registered in Singapore. They are commonly called Pte Ltd.
Today, there are several types of Singapore companies, but Pte Ltd — limited liability organizations that are somewhat similar to Russian LLCs-are particularly popular among non-residents.
If you believe the actual and statistical data, then most of the firms in Singapore are opened in the legal form of Pte Ltd. This choice is due to the fact that only individuals can participate in these companies, but their number should not exceed 20 people.
Most foreign organizations open a subsidiary in Singapore, which operates as a separate legal entity. This decision is due to the fact that in this case the parent company is not liable for the obligations of the subsidiary, in addition, a foreign organization can act as the sole shareholder of the subsidiary branch. In addition, subsidiaries are eligible for tax breaks that apply to Singapore resident firms.
Also, foreign entrepreneurs often register branches and representative offices here. Due to the fact that the branch is an extension of a foreign parent company, its obligations will also affect the parent company. The representative office does not have a legal status. It can only be used to perform various research in the field of marketing.
A Singapore company with a turnover of less than $ 5 million per year is not required to be audited. This means that firms that do not reach or exceed this indicator submit a declaration of solvency, certified by the signature of the responsible persons of the organization. As long as a Singapore company shows solvency, it will not need to submit accounting reports to ACRA. In turn, this increases the trusting attitude of managers and shareholders of newly emerged firms to the offshore sector. Accounting and reporting requirements for newly registered companies are preserved, and they allow you to apply for loans from major banking institutions.
Singapore company registration and its benefits
Currently, there are nine advantages of registering a company in Singapore.
- A newly opened company does not pay corporate tax for the first 3 years from the moment of registration for the first 100 thousand dollars of profit.At the end of the term, income tax is calculated as follows::
- with a profit of $ 100,001 – $ 300,000 at the rate of 8.5%;
- with a profit of more than $ 300,000 at a rate of 17%.
- There is no capitalization tax in Singapore.
- The dividends that shareholders receive from Singapore companies are also tax-exempt.
- Singapore strongly and reliably protects the personal assets of investors, as banking secrecy and data secrecy are enshrined in the country by law.This means that Singapore’s banks are among the most reliable in the world, and the national currency is ideal for long-term savings.
- They do not control currency exchange transactions and do not prevent the withdrawal of profits to corporate accounts that are opened in the fin.institutions in other countries.
- Registration of a company helps to get a residence permit in the country-Entre Pass.
- Business digitalization is underway in Singapore.If you have left the country, you can continue communicating with the authorities and other authorities online.The owner of the company has the right to get acquainted with the news of various state institutions of this country via twitter.If you want to live in the country or are given an Entre Pass, you will also receive a SingPass-a password for contacting government organizations.
A similar mechanism is currently being used in Estonia. If you need to submit information to ACRA, today you can do it remotely through a special service, using SingPass and FIN No.
Thus, the registration of companies supports the use of the latest information technologies. From the very first moments of registration, customers will understand how well the country’s support mechanism for “offshore companies”is developed. Political stability, government support, and a legal framework that protects intellectual property have made Singapore attractive to investors.
- The Singapore company is not considered an offshore company, so bankers around the world usually do not have negative emotions about it.When they get their hands on the company’s documents, they just smile.This means that if you applied to a bank with the documents of such a company, then the chance of opening a corporate account with well-known foreign banking institutions is quite high.
- In this country, both companies opened by residents and non-residents are treated equally.In other words, non-residents have the same rights as resident companies.
The absence of a capitalization tax, reliable protection of intellectual property, and preferential taxation allow the country to occupy a leading position in the World Bank’s Ease of doing business rating.
How do I register a company in Singapore?
If you intend to submit an application for registration with ACRA, you will need to::
- appoint at least one shareholder;
- make a minimum start-up capital contribution of 1 Singapore dollar;
- find and assign a secretary;
- select a local director;
- provide the local legal address of the office.
Before starting the company registration procedure, a businessman should check the full availability of documents. This means that the name of the company must be approved, the main types of activities, shareholders, director and secretary must be defined, the constituent documents must be drawn up, and the legal address must be fixed.
You will also need to open an account with a local bank and get a document confirming payment of the authorized contribution. Next, you will need to register with the tax authorities and the social insurance bureau, and issue a business license if necessary.
Every year, thousands of professionals flock to start a business in this country, as it has a strong economy and offers the best conditions for development. The state is famous for its export operations, equipment manufacturing, innovative solutions, financial sector and tourism activities. In addition, Singapore is characterized as one of the busiest seaports in the world. If you are looking for a place to develop or start a business in the Asian region, then this country is best suited for such purposes.